The location determinants of FDI in the GCC countries

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    78 Citations (Scopus)

    Abstract

    This paper studies the location determinants of FDI flows to the GCC countries, along Dunning's [Dunning, J., 1981. International Production and the Multinational Enterprise. Allen & Unwin, London] OLI paradigm. The paper uses panel data for the period 1980-2002. Panel data model estimates show that oil potential, measured by oil reserves, and oil utilization, measured by oil production, have a surprisingly negative influence on FDI flows, contrary to expectations about positive association between GCC oil resources and FDI flows. However, the relative degree of oil utilization, measured by oil production relative to oil reserves, has a positive influence on inflows. Similar to oil potential and oil utilization, oil price has a negative influence. Estimates also show that while institutional quality, trade openness and infrastructure development encourage FDI flows, human capital significantly discourages them.

    Original languageEnglish
    Pages (from-to)336-348
    Number of pages13
    JournalJournal of Multinational Financial Management
    Volume17
    Issue number4
    DOIs
    Publication statusPublished - Oct 2007

    Keywords

    • Foreign direct investment
    • Gulf Cooperation Council
    • Location advantage

    ASJC Scopus subject areas

    • Finance
    • Economics and Econometrics

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